Middle Georgia Real Estate Blog

    Way back when I was in the first grade I remember getting in trouble for acting up in class one day. I don't actually recall what I did, but I do remember the teacher giving me a note to take home to my parents that day.

    That note felt like a lead weight in my hand as I left the school yard on my way home. It was stapled together but I just had to know what it said before handing it over to my dad and facing my certain execution.

    I snuck off to a corner of the playground and began to work at the staple with my fingernail so as to ease it out without tearing the paper. Of course, my plan failed miserably and I ended up fumbling with it until I cut my finger bleeding on the note and tearing a hole in it. 

    Bottom line, instead of fessing up and getting a simple yelling at or grounding from my parents, I ended up getting my butt blistered not only for the original crime, but also for trying to hide it!

    In the real estate world when we put our home on the market for sale we are asked to fill out a Seller's Property Disclosure Statement. In this 4 page document you will be asked to disclose any problems or issues you have had with the home that you are aware of. You will be asked to make a potential buyer aware of anything from past problems with a leaky roof, plumbing and electrical issues, foundation problems, past termite activity, prior insurance claims and numerous other things that may have an impact on a buyers decision.

    Sellers often feel that this is an intrusion and that by disclosing past problems with a home they might lose a buyer.    

    The truth is that the Disclosure Statement is as much a protection for the seller as it is for the buyer and by making a buyer fully aware of any problems, you, as a seller, are protecting yourself from something coming back to haunt you later on after the home is sold. 

    So when your agent asks you to fill out a Disclosure Statement prior to listing your home, just put it all in there; the good, the bad and the ugly. I learned a long time ago that it's best to just fess up right off the bat rather than getting your butt blistered down the road!

    A buyer told me recently that they were in the market for a house and they only wanted to look at foreclosures. When I asked them why they told me that they were looking for a "deal".

    It has occurred to me in the past that the general public's perception is that, if it says "foreclosure" it has to be a "deal", and when I heard this buyer's statement my belief was only reinforced.

    It is true that there are occasional "deals" to be had with a foreclosure but the truth is, after being involved in many REO or bank owned transactions, that many properties that are foreclosures are not great bargains.

    It's important to keep in mind that these properties are listed and marketed by local brokers and agents that know the market well. When they prepare a BPO (Brokers Price Opinion) for the bank that owns the property, they provide area comparable sales and take into consideration the condition of the home. Subsequently, most foreclosure homes that go on the market are priced at, or close to, market pricing. The ones that are priced dramatically below market pricing are usually in need of a considerable amount of work and investment to bring them up to market value.

    There are deals to be had out there and considering todays market conditions they are often found with regular sellers that are highly motivated to make a move for one reason or another.

    We all like to save money and there is a certain thrill with finding and negotiating a "deal" but when you set out with your sights on the bargain of the century, do not limit your search to the narrow selection of foreclosed properties, try to see it all!

    Throughout a real estate transaction we often hear the term "closing costs" but there seems to be some confusion as to what these costs are and who pays them.

    Closing costs are simply the costs involved with purchasing a home and are largely the buyers responsibility. They include fees such as loan origination, attorney, appraisal, court filing, credit report, underwriting, hazard insurance, title examination and various loan related items.

    Although there is not one set way to determine how much these closing costs will run, a very general rule of thumb is that they will cost roughly 3 to 3.5% of the loan amount. Example: a $100,000 loan could cost from $3,000 to $3,500 in closing costs. The best way to know for sure is to check with your lender and get a good faith estimate which will give you a break down of all costs related to obtaining the loan.

    In addition to closing costs you may have escrow funding fees which is a separate issue from closing costs. These are the funds you will need if you set up an escrow account for your home owners insurance and property taxes. You will be required to pre-fund your escrow account with a pre determined amount to be paid at closing.

    Closing costs are generally considered to be charged to the buyer but they can be paid by the seller as well. This is negotiated up front and the seller may agree to pay all, a portion of, or no closing costs on the buyers behalf. There is no hard fast rule on this and although it is common practice to ask the seller to make some sort of contribution to the buyers closing costs, whether or not they do is negotiated at the outset.